Response to the following :
1. Newton, Inc., issues $400,000 of 6%, 20-year bonds payable that are dated April 30. Record (a) issuance of bonds at par on May 31 and (b) the next semiannual interest payment on October 31.
2. Microdot Printing issued $600,000 of 8% bonds payable at 97 on October 1, 20X0. These bonds mature on October 1, 20X8, and are callable at 102. Microdot pays interest each April 1 and October 1. On October 1, 20X5, when the bonds' market price is 101, Microdot retires the bonds in the most economical way available.
Required:
Record the payment of the interest and amortization of bond discount at October 1, 20X5, and the retirement of the bonds on that date. Microdot uses the straight-line amortization method.